The key, according to this article in The New York Times, is crappy soil, acidity, a bit of moisture, and moss spores.

But in our opinion, the best thing about planting large areas of moss is that you get to use a blender. If you can't find or afford to buy large amounts of moss, you can take a smaller amount and chop it up with a bit of water and beer or buttermilk. This adds the acidity moss likes. Then, spread the green slime over some bare soil or rocks, mist with water now and then (or just locate your garden, like ours, in Portland, Oregon), and wait a while.

Check out the detailed instructions at Moss Acres. You'll end up with a beautifully varied carpet of green that you don't have to mow.